Toyo Co posts $139 million revenue with 1.6 GW solar cells shipped, raises 2025 guidance to $375-$400 million amid strategic acquisitions and production expansion.

Kate - Operator - (00:04:06)

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time I would like to welcome everyone Toyo Co. Ltd announces first half 2025 financial results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed with number one on muter telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Crocker Carlson Investor Relations. Lisa, go ahead.

Lisa - (00:04:49)

Thanks so much, Kate. Hello everyone. Thank you for joining us to review Toyo's 2025 first half results. This morning Toyo posted both the earnings release and the related investor presentation to its website and you can find that at investors.toyo-solar.com with us on the call today, we have Mr. Yun Se Ryu, Toyo's Founder and Chief Executive Officer. We also have Raymond Chung, Toyo's Chief Financial Officer and Simon Shi. The senior management team is in New York today in advance of participating in the HCW conference today and tomorrow and they'll also be present at the RE Plus Conference on September 10th and 11th. After the prepared remarks are concluded, we're going to open up this call to your questions. But before we begin, I'd like to let you know that some statements in the teleconference are forward looking within the meaning of federal securities laws. Although we believe these statements are reasonable, we can provide no assurance that they will prove to be accurate. Because they're perspective in nature, actual results could differ materially from those we discuss today. We encourage you to review the most recent report on Form 6K and other SEC filings for risk factors that could materially impact our results. As I mentioned, the earnings release is available on our website@investors.toyosolar.com with those formalities now out of the way, it's my great pleasure to turn this call over to Mr. Yun Se Ryu, Chief Executive Officer. Please go ahead.

Yun Se Ryu - Founder and Chief Executive Officer - (00:06:33)

Okay, thank you. Against the highly dynamic backdrop for the renewable energy sector, marked by shifting tariff structures and evolving global supply chains, our team has executed with agility and precision. We have successfully adapted our sourcing and production strategy to maintain both competitiveness. Thank you. Last week we announced the acquisition of the Visun brand from our sister company, Vietnam Sun Energy Joint Stock Co. A strategic move to streamline and unify Toyo's operations by bringing the Visun brand fully. Under our umbrella. Visun and Toyo have long operated as sister companies, not only through common control, but under our majority shareholder, Pay Balance Corporation, but also through deep ongoing business collaboration. This acquisition of the Visun brand positions us to accelerate Toyo's growth and expansion to the next level. Since 2018, many of Visun branded solar modules have been delivered to the US market, a testament to the brand's strong customer and success in utility scale developed deployments. Recognized that by leading financial institutions and backed by insurance from MIGA, the Visun brand strengthens Toyo's market credibility reinforces customer confidence. Our new solar cell manufacturing facility in Ethiopia is now operating at full 2 gigawatt capacity. As we have commenced production for an additional 2 gigawatt capacity in Ethiopia, we remain on track to double that to 4 gigawatts by October 2025. This facility provides us with a compelling cost structure, state of the art technology, abundant green pet power and some of the lowest tariff rates available. It's expected that this trend will continue. In the United States, we have trial production at our new module facility in the Houston metropolitan area. Delivering on our Made in USA for the USA strategy Through our sister company vsan, we will leverage the newly acquired Visun brand to build on Visun long standing relationship with many of North America's leading utility scale developers. These partners are eager to deploy panels that combine industry leading performance with the benefits of the manufacturing. Looking ahead, we will continue to work closely with our industry partners to migrate the supply of key components to the US Wherever possible, further strengthening our supply chain and reinforcing our our commitment to American manufacturing. I will now turn the call over to our CFO Raymond Chung to review our financial results.

Raymond Chung - Chief Financial Officer - (00:14:03)

Thank you, Yun Se Ryu. Okay, let me take over from here. Okay. In the first half of 2025 we delivered 1.6 gigawatts of solar cells, up from 985 megawatts in the same period last year. In terms of revenue, we generated approximately $139 million in the first half of 2025, which increased 0.7% from $138.1 million in the same period last year. The increase was due to the positive contribution of our new solar cells line in Ethiopia which began in April 2025, serving US and customers and providing more attractive pricing and margin opportunities. Our cost of revenue was approximately $160 million for the first half of 2025 compared to $1.4 million for the same period last year. Gross Profit margin was 16.6% for the first half of 2025 compared to 19.3% for the same period last year. The decrease was due to the increasing unit cost of raw materials. Total operating expenses increased 219.9% to approximately $30 million for the first half of 2025 from $4.2 million to the same period last year. Selling expenses were approximately $3 million for the first half of 2025 compared to $40,000 for the same period last year. The increase was attributable to a higher sales commission from general and administrative expenses were approximately $11 million for the first half of 2025 compared to $3.8 million for the same period last year. The increase was primarily due to expenses related to managing new facilities in Houston and Ethiopia as well as increased expenses associated with being a public company. Non GAAP adjusts the ebitda of approximately $23 million for the first half of 2025 compared to $33 million for the same period last year, reflecting increasing in operating expenses and reduced sales volume to the US market as Vietnamese capacity was allocated to non US regions while Ethiopia's operations only commenced in April 2025 as well as changes in fair value of a contingent consideration payable related to earn off shares. Net income attributable to our shareholders was approximately $4 million for the first half of 2025 compared to $19.6 million for the same period last year. Earnings per share basic and diluted were $0.10 compared to earnings per share basic and diluted of $0.48 for the same period last year. Turning to our balance sheet, as of June 9, 2025 we had a total of approximately $30 million in cash and current restricted cash compared to $15.1 million as of December end 2024. As we move into second half of 2025, our priorities are clear. We are expanding solar cell production at our Ethiopian facility for the 4 gigawatt run rate while strategically redirecting output from our Vietnam operations to a high growth market that are not impacted by the elevated U.S. tariffs in the U.S. we will take a measurable approach to extending our module capacity, aligning that growth with the refinement of our sourcing strategy and disciplined allocation of investment. Even with recent shift in energy policy, we remain confident that solar is the fastest, the most cost effective way to add capacity to the energy grid and meet the increasing rise in electricity demand across the US and other development countries. The cash flow generated from our facilities will give us the flexibility to fund this expansion from within the launch of US production Also makes also marks the beginning of a strategic consolidation of the Beeson brand sales channels and customer base into Toyo. This integration will create a streamlined, unified organization capable of delivering the high performance solar solution that utility scale customers expect. Geared with all these strategic initiatives for the full year of 2025, we expect to exceed our previous guidance of 3.5 GW in solar cell shipment, projecting approximately 4.2 to 4.4 GW for the full year 2025. This is anticipated to drive revenue in the range of approximately 375 to $400 million with projected net income between approximately 39 million and $45 million. We look forward to sharing more on our strategy in the near future as we believe it will meaningfully strengthen our financial profile and enhance the value we deliver to our shareholders. With that, we'll be happy to address your questions.

OPERATOR - (00:21:36)

At this time I would like to remind everyone, in order to ask a question, please press Star then the number one on your telephone keypad. We will pause for just a moment to compile the Q and A roster. Our first question comes from the line of Justin Smith with Maxim Group. Your line is open.

Justin Smith - Equity Analyst - (00:21:57)

Hi. Thank you everyone and congratulations on the good quarter and first half of the year. My question was relating to gross profit margin you everyone discussed. I saw that it briefly declined or very marginally declined year over year. But as the Ethiopia facility reaches scale and Houston production comes online, you know, do you see any way where those gross margins start trending back, you know, higher up to where they were in 1H24 or some of these tariff related costs sort of weighing on that and putting a cap on that. Thank you.

Raymond Chung - Chief Financial Officer - (00:22:47)

Hey Jthe UStin, thank you for the question. Yes, our gross margin decreased slightly for the first half of the year mainly for two reasons. Number one, the plan of the product destination for our products shift earlier this year was changed from last year. Last year over over 80% actually were shipped to the US. And for the first half of the year we have only 44% are going to the US. And with the change of the product plan, our margin was slightly affected. Secondly also becathe USe we were in a process of ramping up of the production in Ethiopia. So the overall cost, the cost of the products was during a process of being refined. So that's why. That's the two main reasons our gross margin is slightly slower, lower than what it was last year. And going forward with our efforts to refine our cost structure and sourcing strategy, we do hope to see our gross margin level to at least go back to what it was last year. Jthe UStin.

Justin Smith - Equity Analyst - (00:24:08)

Okay, that's very helpful and thank you for the detail there. I appreciate it. Once again, congrats on the good results.

Raymond Chung - Chief Financial Officer - (00:24:16)

Thank you.

OPERATOR - (00:24:20)

Again. If you would like to ask a question, press star one on your telephone keypad. I will now turn the call back over to Yun Se Ryu for closing remarks.

Yun Se Ryu - Founder and Chief Executive Officer - (00:24:57)

So we want to thank you all for your time this morning. I know that the company is going to be visiting with a number of investors and analysts later this week, and happy to answer your questions in person. If anybody has any follow up questions after the call, please reach out to investor relations. And we're happy to either get back to you or schedule a meeting with management. This now concludes our call. Operator, thank you so much.

OPERATOR - (00:25:26)

Ladies and gentlemen. That concludes today's call. Thank you for joining. You may now disconnect.